Nepal applauds long term agreements signed during PM Prachanda’s India visit

Kathmandu: Nepali officials and experts have lauded the agreement reached between Nepal and India because of the far-reaching benefit Nepal could take from the implementation of those agreements.

Major agreements were signed in the areas of energy, trade and transit and connectivity during Nepali Prime Minister Puspa Kamal Dahal ‘Prachanda’s visit to its southern neighbour.

Vijay Kanta Karna, Nepal’s Former Ambassador to Denmark, who is keen observer of Nepal’s international relations told the India Narrative that that two countries initialling the long-term agreement on power trade and Indian Prime Minister Narendra Modi’s announcement that the southern neighbour would buy as much as 10,000MW in 10 years would provide big opportunity for Nepal in the power sector.

“In fact, India has challenged Nepal to produce 10,000MW for exporting to India only in 10 years. It is up to Nepal whether it can overcome this challenge considering the past failures,” he said.

He said that possible massive investment in Nepal for 10,000MW electricity market in India has potential to transform Nepal’s economy and create massive job opportunities in the country’s whose youths have been migrating for foreign employment in hordes every day due to the lack of job opportunities at home.

Madhu Bhetuwal, joint secretary at Nepal’s Ministry of Energy, Water Resources and Irrigation said that the agreement on long-term power trade was a milestone in cooperation in the sector.  “It has opened the door for entities involved in power generation and trading to sign long-term power purchase agreements with the Indian companies,” he said. “Long-term power purchase agreement with Indian companies will guarantee the markets for investors and they will be ready to invest in hydropower generation in Nepal.”

As the first step towards trading of power between Nepal and India, two countries signed a power trade agreement in 2014. Scope of power trade was expanded through Joint Vision Statement on Power Sector issued jointly in April last year when Nepal’s Former Prime Minister Sher Bahadur Deuba visited India.

The Joint Vision Statement has talked about expanding the cooperation among the Bangladesh, Bhutan, India and Nepal (BBIN) region. “The long-term agreement on power trade with India is the third such milestone which has strengthened the vision of the past two agreements,” said Bhetuwal.

Besides signing long-term agreements, many other agreements on the power sector were signed and some of the joint projects were inaugurated.

Another important agreement that will have far reaching benefit for Nepal is the agreement reached on amending the Nepal-India Treaty on Transit, according to officials and experts.

Nepal is a landlocked country and revision in transit agreement will provide Nepal access to India’s inland waterways.  “Despite being a landlocked country, it gives Nepal an access to sea through the waterways which is a major milestone,” said Karna.

During the joint press conference, Prime Minister Modi recalled his speech he gave in Nepal’s parliament during his first official visit to Nepal as Prime Minister of India in 2014.

He had given the HIT formula to improve Nepal-India relations referring to H-Highways, I-ways, and Trans-ways.

“I said we will establish such contacts so that our borders do not emerge as barriers. Today, the Nepal PM and I have taken many important decisions to make our partnership a super HIT in the future,” Modi said.

Nepali experts say that access to India’s inland waterways would lead to successful implementation of the Modi formula.

India has been developing inland waterways to connect its inner parts with waterways. As part of enhancing connectivity through waterways, Nepal has also established a government owned—Nepal Shipping Office.

“Essentially, there have been several agreements on connectivity particularly in the areas of digital connectivity, railway connectivity and waterways connectivity during this visit,” said Karna.

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